ALJDEC decisions subject to certification as final

2019A-01358-CHC-ROC · Registrar of Contractors · 2021-01-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dale Ellen Sprink-Glass,

COMPLAINANT,

v.

Desert Star Homes LLC,

ROC License No. 278477,

RESPONDENT.

No. 2019A-01358-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 20, 2020 at 1:00 PM & December 17, 2020 at 9:00 AM.

APPEARANCES: Dale Ellen Sprink-Glass (“Complainant”) appeared with Woodrow Glass and Stephen Lawton as witnesses. Dean Clouse, Esq. appeared on behalf of Desert Star Homes LLC (“Respondent”) with Dennis Bondra and Joseph Duncan as witnesses.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

On April 27, 2022, the Registrar issued License No. 278477 for general residential B contracting to Respondent. Respondent’s address of record for the license is 3903 N. Gila Plain Trl. Buckeye, Arizona 85396-3692. Joseph Duncan is listed on the license as the Qualifying Party and Member.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 278477, as reflected on the Registrar’s public website on December 17, 2020. Such prior license record reflects that Respondent’s license is active and currently renewed through April 30, 2022. The license has not been previously disciplined. The record reflects that there is one open complaint against Respondent’s license, which is presumed to be related to this matter. Respondent has a $9,000.00 surety bond for the license issued through Merchants Bonding Company, effective June 17, 2016.

On March 18, 2019, the Registrar received a complaint filed by Complainant alleging non-completion of a new residential build project. The complaint contained 20 complaint items. Attached to the complaint were copies of financial and title related documents for the home.

On March 26, 2019, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by an investigator on April 16, 2019, at 11:00 a.m.

On April 09, 2019, the Registrar’s correspondence to Respondent was returned by the United States Postal Service as undeliverable.

On April 16, 2019, Registrar investigator Stephen Lawton (“Investigator Lawton”) inspected the work that had been done on the project to date and took 49 photographs of the project.

Investigator Lawton did not draft Jobsite Inspection Notes because he received an addendum complaint from Complainant on April 29, 20219. The addendum complaint contained 34 additional complaint items.

On July 03, 2019, Investigator Lawton apprised Respondent of Complainant’s addendum complaint and issued a second Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site to review Complainant’s addendum complaint items on July 24, 2019, at 2:00 p.m.

On July 24, 2019, Registrar investigator Lawton re-inspected the work that had been done on the project to date and took 14 additional photographs. When he was finished, investigator Lawton drafted Jobsite Inspection Notes.

Respondent was present, as his contact information had been updated since the prior jobsite inspection.

Several of Complainant’s complaint items were consolidated because they were repetitive or substantially related to one another. In all, investigator Lawton had a total of 27 complaint items, including those from the addendum complaint, to consider.

On August 20, 2019, Investigator Lawton issued a Directive from the Registrar to Respondent because he determined that some of the work Respondent had performed on the project failed to meet minimum workmanship standards. Respondent was put on notice that he had until 5:00 p.m. on September 09, 2019, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

Ultimately, Investigator Lawton substantiated 23 of Complainant’s 27 complaint items. Complaint items 4, 12, and 17-18 could not be verified for substantiation or had been corrected by Complainant.

On September 25, 2019, Investigator Lawton issued a Compliance Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site on October 11, 2019, at 1:00 p.m.

On October 11, 2019, Investigator Lawton completed his compliance jobsite inspection whereby he determined that complaint items 3, 10, 14, 23, and 26 had been completely corrected; compliant items 9, 11, 13, and 19 had been partially corrected; and that complaint items 1-2, 5-8, 15-16, 20-22, 24-25, and 27 had not been remediated by Respondent.

On October 15, 2019, Investigator Lawton escalated Complaint No. 2019-01358 to the Registrar’s legal department with citation recommendations.

On October 16, 2019, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until October 31, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On October 31, 2019, the Registrar received Respondent’s Answer whereby Respondent denied the statutory allegations in the Citation, and alleged that all items identified for remediation by Investigator Lawton’s Directive had been “address and/or repaired and done to the standard quality and skill or other similarly licensed contractors.” [sic] Respondent further alleged that remediations were delayed because a bathroom door had to be custom ordered, and Complainant failed to respond to its September 03, 2019, installation request for 36 days and would not let Respondent complete the installation until October 23, 2019. Additionally, Respondent alleged that Complainant caused undue delay to Respondent’s repairs and denied access to the jobsite until August 15, 2019.

On November 08, 2019, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on January 02, 2020. Per the January 14, 2020, Notice of Hearing the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges:

Charge 1: A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3).

Charge 2: A violation of A.R.S. § 32-1154(A)(22) (“Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive.”).

Hearing Evidence

Complainant testified on her own behalf, called Investigator Lawton and Woody Glass as witnesses, and submitted 4 exhibits. Respondent called Dennis Bondra and Joseph Duncan as witnesses and submitted 17 exhibits. The Registrar’s agency file and Notice of Hearing were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant owns residential property with her husband located at 4614 N. Chelsea Dr. Buckeye, Arizona 85396. The residence is within the bounds of a homeowner’s association (“HOA”).

Complainant’s elderly mother is domiciled at Complainant’s residence.

On March 17, 2017, the Certificate of Occupancy was issued for Complainant’s residence.

On an unknown date, Complainant agreed to extend Respondent’s Directive compliance deadline to October 21, 2019, but required Respondent to provide a written 2-week notice for all onsite repairs. To that end, Complainant cancelled numerous repair appointments but never waived her notice requirement for Respondent.

On July 20, 2020, Investigator Lawton conducted a Prehearing Jobsite Inspection at 3:30 p.m. whereby he determined that of the 18 complaint items Respondent had failed to address and/or otherwise complete by the compliance jobsite inspection, 10 additional complaint items had been satisfactorily remediated by Respondent. Specifically, complaint items 2, 5, 8, 9, 10, 14, 19, 20, 22, and 24 had been remediated per the Registrar’s minimum workmanship standards.

Investigator Lawton determined that complaint items 1, 3, 6-7, 11, and 15 had not been addressed or had not been satisfactorily remediated per the Registrar’s minimum workmanship standards.

In closing, Complainant admitted that her husband had “investigated” Respondent’s workmanship of her French doors by “removing” the top 2 screws of each door, but argued that his actions had not materially affected the doors.

In closing, Respondent argued, based on rebuttal evidence it presented, that it had successfully remediated complaint items 1, 3, 7, 11, and 15. Respondent also argued that it was not legally responsible for remediating complaint item 6 because that item had been completed per contract, and the only reason it was at issue was because Complainant’s HOA would not approve the color.

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

Ariz. Admin. Code R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

The material facts in this case are clear.

It is clear that Complainant contracted with Respondent for the construction of a new residential build, whereby said contract was paid the full price, and that some of Respondent’s work on the project fell below the Registrar’s minimum workmanship standards. It is also clear that the Registrar’s post investigative Directive required Respondent’s full compliance by the extended date of October 21, 2019, and that Respondent did not timely comply. Instead, Respondent remediated all complaint item remediations, except for complaint item 6, by July 20, 2020.

Therefore, the only remaining issue is whether Respondent raised sufficient justification or excuse for failing to timely and completely address compliant item 6 as instructed by the Registrar’s Directive. This is an affirmative defense that Respondent bears the burden to establish. Here, the record reflects that Complainant intentionally and voluntarily selected a color that Respondent applied to the home. Complainant literally got what she asked for. It was never Respondent’s responsibility to double-check or otherwise ensure that Complainant’s selection was on her HOA’s approved list of paint colors. Thus, Respondent established an affirmative defense by a preponderance of the evidence for refusing to repaint the exterior of Complaint’s home as required by the Directive.

Because Respondent is excused from remediating complaint item 6, and because Respondent successfully remediated all other outstanding complaint items per the Registrar’s Directive, no grounds exist to discipline Complainant’s license under Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, or 32-1154(A)(22).

The undersigned concludes that Complainant has not sustained her burden of proof in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that Complaint No. 2019-01358 be dismissed.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification.

Done this day, January 06, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors